How Should A Firm Go Public?

There are different methods to go public in the US. You can find three key stages of listing:

Here are the levels of quotation listing.

OTC PINK SHEETS:

The oldest quotation service for over the counter stocks usually termed "the pinks". There are technically no requirements for reports or audited financials on the pinks, however, the pinks have established their own voluntary reporting system and implement it by publishing symbols to denote the level of disclosure each organization is subscribing to. To publish voluntary information requires fees of roughly $5000 a year.

THE OTC BB: The OTC Bulletin Board is controlled by the Financial Industry Regulatory Authority (FINRA) and requires that all companies whose stock is exchanged on the OTC Bulletin Board keep their current reporting status with the Securities and Exchange Commission (SEC), which requires current audited financial statements. There are no charges paid to FINRA for this quotation, but keeping a public company current with its SEC reports can cost $25,000 - $50,000 per year.

EXCHANGES:

The OTC PINK SHEETS and the OTC Bulletin Board are useful stock markets especially for emerging and new companies, but clients with well known businesses will prefer to be on one of the developed and higher stock markets - Nasdaq Small-Cap, Nasdaq NMS or NYSE. Each of these exchanges has its own qualifications that a company must meet to be listed on the exchange. Typically the types of qualification elements they look for include asset levels, number of shareholders, required Board level committees, revenues, and market capitalization. In addition all exchanges want the company to keep a current reporting status in the Securities and Exchange Commission (SEC). Listing on the stock markets usually involves fees in the range of hundreds of thousands of dollars.

For a US company a listing on the US stock markets improve points. For Example, a quotation is a way to:

1) Grow your company faster and make it more strong by increasing your ability to bring in "mergers", "acquisitions" and also "strategic partners;

2) Develop your company faster and make it more powerful by increasing its ability to compete for large corporate contracts;

3) Strengthen your personal profit as an owner by decreasing the amount of time it will take to make money on your investment, and also increasing the value of your company, as well as, adjusting the liquidity of your asset to a more liquid form than that of a private company;

4)Raise money faster and cheaper by improving the "liquidity" factor for your shareholders

Now most of these considerations are for companies going public from scratch. For those of you seeking to invest in a shell corporation (public shell), to go for mergers, then you might want to look at changing a quotation as above. For more information on this subject try googling keywords like "mergers companies" or "reverse mergers".

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How Should A Firm Go Public?

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